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The Ed Show for Wednesday, January 25, 2012

Read the transcript to the Wednesday show

Guests: E.J. Dionne, Robert Reich, Sam Stein, Alan Grayson, Lena Taylor

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED
SHOW tonight from New York.

Breaking news out of Phoenix, Arizona, where the president was about
to speak about jobs this afternoon, the president and Arizona Governor Jan
Brewer, well, they got into it on the tarmac. This picture was taken of
the exchange.

The president was apparently unhappy with something the governor wrote
in her book. Brewer didn`t like what the president had to say, and stuck
her finger in the president`s face. We`ll have more on this with E.J.
Dionne in just a bit.

We got a lot to talk about tonight.

This is THE ED SHOW -- let`s get to work.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: All totaled, the tax rate is
really closer to 45 percent or 50 percent.

SCHULTZ (voice-over): Mitt Romney unveils a brand new misleading
defense for his sweetheart tax rate. Robert Reich is here to set the
record straight.

Newt Gingrich is stepping on Mitt Romney`s back to climb the polls.

in a world of Swiss bank accounts and Cayman Island accounts to have this
fantasy far from reality.

SCHULTZ: Sam Stein is here with the latest from the campaign trail.

Nancy Pelosi has a grim prediction for a Gingrich presidency.


JOHN KING, CNN: Why are you so sure?

PELOSI: There is something I know.

GINGRICH: She lives in San Francisco environment, very strange
fantasies. If she knows something, I have a simple challenge -- spit it

SCHULTZ: Former Congressman Alan Grayson is here with the latest.

CROWD: Recall Walker! Recall Walker!

SCHULTZ: And big developments in Wisconsin today. Scott Walker is
raising loads of cash to fight the recall, but that money could mean
trouble for the governor. State Senator Lena Taylor is here on explain.


SCHULTZ: Good to have you with us tonight, folks. Thanks for

President Obama knows what kind of fight he`s in for this year. He
was in Iowa today at a manufacturing plant, just what he talked about in
the speech last night. The president told the crowd, "We can`t go back to
failed policies of the past."


happened, there are people in Washington who seem to have collective
amnesia. They seem to have forgotten how we got into this mess. They want
to go back to the very same policies that got us into it. The same
policies that stacked the deck against middle class Americans for years.


SCHULTZ: This was the same message the president had of the State of
the Union last night. American people approve of the message. A CBS News
poll found that 91 percent of the people watching the speech, they are in
favor of the proposals the president laid out last night. Think about that
-- 91 percent, only 9 percent disapprove. That`s a heck of a number, isn`t

But, of course, Republican members of Congress, they are with the 9
percent. They don`t approve of policies like this.


OBAMA: It is time to stop rewarding businesses that ship jobs
overseas and start rewarding companies that create jobs right here in
America. Send me these tax reforms and I will sign them right away.



SCHULTZ: Republican House Leader Eric Cantor sat on his hands while
President Obama outlined a plan to stop outsourcing of jobs in this

This is a good thing for America. Cantor isn`t interested in good
things for America, at least that`s what it looks like. Even improvements
in the economy aren`t good things to Eric Cantor.


REP. ERIC CANTOR (R-VA), MAJORITY LEADER: The bottom line is overall,
this economy could be doing a lot better and the reason why we`re not doing
better is the policies that have been promoted by the president and the
White House haven`t worked.


SCHULTZ: Time-out. He said the bottom line -- I got a bottom line
for you, Mr. Cantor, right here. Right here.

Proposals President Obama made in the speech. Here we are. Here is
where the country is, 91 percent approve. That`s a CBS News poll.
Disapprove, 9 percent.

How`s -- is that a good bottom line or bad bottom line? I don`t know,
I`m just asking. Because I was in the House chamber last night and I was
absolutely amazed at the behavior of some of the members. No need to get
angry, it`s just a speech.

Republicans would not applaud the rebirth of the American automobile


OBAMA: In exchange for help we demanded responsibility. We got
workers and automakers to settle their differences. We got the industry to
retool and restructure.

Today, General Motors is back on top as the world`s number one



SCHULTZ: Did he say number one? You mean, we`re number one at

The United States of America, we`re not three, we`re not two. We have
a company that`s number one. President Obama didn`t take credit for the
automobile industry success. He used the word "we."

But he has every right, I think, to take some credit. In February of
2009 -- here`s another bottom line for you there, Cantor -- in February,
2009, 72 percent of the American public said that the United States should
not give Chrysler and General Motors a loan. That`s most of the people who
are against it.

But the president, well, he knew he had to do the right thing for
American jobs. I guess you could say that he showed true leadership.

The loan saved more than one million jobs and prevented a loss of
nearly $97 billion in personal income in America.

Let`s consume that now -- 72 percent of the people, this is another
good thing for America. But Republicans can`t applaud because -- that
might help the president. They don`t want to do that.

It`s the same thing with good news about jobs.


OBAMA: Businesses have created more than 3 million jobs.



SCHULTZ: Where I was sitting, it was to the left -- the president is
right here speaking, I was sitting to the left right up there in the
balcony, and down below, there was about probably 100 Republicans sitting
together, you could tell none of them were moving during the speech. They
tried to integrate, you know, Republican-Democrat, but some of them didn`t
do it.

But there was this one section last night in instances like that, they
couldn`t put their hands together for anything. Why were you not
applauding, Speaker Boehner? Are they following your lead?

The numbers are undeniable, 22 months of private sector job growth and
last year was the most growth since 2005? All I`m saying here tonight,
isn`t this a good thing for America? Have we gotten so cynical in America
we deny facts? Deny families having good success, our economy is starting
to move in the right direction?

Republicans can`t bring themselves to applaud this good news, and they
couldn`t do it last night.

Last night, you know what you saw? You saw the full illustration of a
record number of filibusters in action in about one hour. Republicans
don`t have passion for good economic news, they have passion for defeating
the president of the United States.

But President Obama knew exactly what he was walking into last night.
This is why he ended by talking about the shared mission of SEAL Team 6,
and what it symbolizes.


OBAMA: No one built this country on their own. This nation is great
because we built it together. This nation is great because we worked as a
team. This nation is great because we get each other`s backs.

And if we hold fast to that truth in this moment of trial, there is no
challenge too great, no mission too hard, as long as we are joined in
common purpose, as long as we maintain our common resolve, our journey
moves forward. Our future is hopeful. And the State of Our Union will
always be strong.


SCHULTZ: I mean, he`s like a coach in the locker room talking to a
team that has a bunch of hot dogs on the team and a bunch of big
personalities on the team and they have so much potential and they can do
so many things, if they just come together.

President Obama basically was saying last night the American people
playing to our best impulses of Americans is that it is amazing what we can
accomplish as a country, as a people, if we`re not concerned with who gets
the credit. Think about that.

A coach has got a team, it`s basketball season right now, isn`t it?
How were these teams get to the final four unless they are a great team?
Part of being a coach is focusing your talent and focusing your team.

The president knows there are talented people within the arena last
night, and he`s asking them to get together and play together for their
fans. I guess you could say the American people.

Playing to the best instincts of all of us as Americans, it is amazing
what we can do. Did you see what SEAL Team 6 did? It`s amazing what we
can do when we`re unselfish. And we don`t care who gets the credit,
because we know that the team, the United States of America, is going to
benefit -- if we just work together.

Get your cell phones out I want to know what you think. Tonight`s
question: what do Republicans care more about, creating middle class jobs,
or defeating the president? Text A for creating jobs, text B for defeating
the president to 622639. And you can go to our blog at
We`ll bring you results later on on the show.

Joining me tonight, MSNBC contributor E.J. Dionne, senior fellow at
the Brooking Institution and columnist for "The Washington Post."

I tell you what? It`s all about team work. I believe you wrote about
that today, E.J. Dionne, did you not?

E.J. DIONNE, MSNBC CONTRIBUTOR: Yes. I thought it was really
striking the way at the beginning and the end of this speech he used the
bin Laden attack and killing of bin Laden to talk about community, and
those words common purpose, common resolve, and I really think this is a
big argument in the country between people who think that the only thing
that defines us is individualism and our love of individualism. And I
think the other side that also values individualism and individual freedom
but says we don`t work well when we don`t have a sense of community and we
don`t work together.

So, anybody who likes elections that are about big things I think is
going to like this election.

SCHULTZ: In a new NBC News/"Wall Street Journal" poll, E.J., the
number of Americans who think the country is on the right track is up eight
points from last month, 13 points since October. President Obama`s
approval rating right now has never been this good in the last six months.

Is obstruction hurting Republicans more than it`s hurting the
president? I mean, the American people -- they love streaks, we love
winning streaks, and we hear that there`s 22 months of private sector job
growth, and how public sector jobs are going down. Government job numbers
are going down.

I mean, the Republicans should be loving this stuff but they just
can`t -- they just can`t bring it to themselves to say, hey, you know,
we`re moving in the right direction. Who`s winning and who`s losing on
these numbers?

DIONNE: I think the president is gaining ground for a bunch of
different reasons. One, and we talked about this before, he finally went
on offense after that mess during the summer over the debt ceiling and I
think people like their presidents to look strong and make arguments, it`s
what made Ronald Reagan popular. It`s made President Obama more popular.

I think people are starting to feel and there are a lot of other
numbers that suggest too, they`re starting to feel the recovery may
actually be taking hold.


DIONNE: So, people are still hurting in a lot of places, but they are
feeling better about the long term. And thirdly, I think you`re right, the
Republicans have really lost ground on this obstruction and they really,
really misplayed the fight over the payroll tax cut at the end of the year.

And I think John Boehner knows that. I don`t think he wanted to go
down the road he ended up going down for a while, that hurt him, too.

SCHULTZ: At the top of the show tonight, moments ago, I showed the
audience this picture, I`m sure you saw it. This is Arizona Governor Jan
Brewer, visibly as we can see from the picture, upset with the president of
the United States.

She wrote about a meeting that the two had in the Oval Office, and the
president took exception to it. She delivered a letter to the president
when he arrived in Arizona, and handed it to him, saying that she wants to
meet again, the president said he would meet again. And then this heated
exchange took place, the president ended the conversation.

But, E.J. Dionne, I have never seen anyone, any elected official in
the history of this country, unless I`m missing it, treat the president of
the United States like this. What is your take on this exchange? And from
what you see of this picture, I guess we could say a picture tells 1000

DIONNE: It`s a great picture. It`s an amazing picture. I mean, I
suppose you could say Governor Brewer will sell books and help herself with
her base, but I`m not sure how middle of the road voters are going to feel
about that picture with the president.

I think it also tells us something that President Obama actually said
I didn`t like what you wrote about me, actually he stood up for himself.
Back in the bipartisan days, you wonder if he would have said I didn`t like
the attack but it was very well-written. No, he stood up for himself, he
got a response.

But I`ll give Brewer this, she did say after I know again that he
loves this country, heck, there are a bunch of Republicans who won`t even
concede that. We got some concession out of her.

SCHULTZ: I just don`t think you treat the president of the United
States like this, whether you agree with what he said, did, acted,

She is in a position of leadership, and she ought to know -- at least
have the brains to understand -- that he, too, is in a position of
leadership. What a bad moment for a governor, an elected official. That
is not good.

DIONNE: I think it shows us something that`s happened all during
President Obama`s term, which is and -- yes, our Republican friends will
say Democrats and liberals weren`t nice to President Bush and there is
truth to that.


DIONNE: But I think -- it really -- there is something that got even
worse under President Obama where people were willing to say things about
him the whole birther thing, we just hadn`t said about presidents in the

SCHULTZ: Unfortunately, there are going to be some Americans who say,
way to go, Jan, way to stick it to the president. That`s not what it`s
about. It`s about responsibility and leadership and having respect.

For her to come back and cover herself by saying, I really respect the
office of the president. No, you don`t, because that`s how you treated the
man who has the office of the presidency.

E.J. Dionne, thanks for your time. I appreciate it very much.

Remember to answer tonight`s question there at bottom of the screen
and share thoughts on twitter, at @EdShow. We want to know what you think.

There has never been a better time for Democrats to win an argument on
taxes. And Mitt Romney, he is headed right into the buzz saw. Robert
Reich will join me.

And later, Gingrich and Romney are in a dead heat in the polls in
Florida. Sam Stein with the latest from that camp.

Stay with us. We`re right back.


SCHULTZ: Coming up on THE ED SHOW: former Labor Secretary Robert
Reich joins me to talk about Mitt Romney and fairness in the tax code.

In "Psycho Talk," the rebuttal from Indiana Governor Mitch Daniels,
tries to discredit the president`s job record by citing jobs Apple created
in other countries?

And as Wisconsin Governor Scott Walker delivers his state of the state
address, we`ll have the latest recall news with State Senator Lena Taylor.
It`s interesting. Share your thoughts on Twitter using #EdShow. We`re
right back.


SCHULTZ: Welcome back to THE ED SHOW.

Democrats have a rare opportunity to win an argument on tax reform
based on basic fairness. Here`s President Obama putting it in simple terms
last night.


OBAMA: Right now, because of loopholes and shelters in the tax code,
a quarter of all millionaires pay lower tax rates than millions of middle
class households. Right now, Warren Buffett pays a lower tax rate than his

Tax reform should follow the Buffett Rule. If you made more than a
million dollars a year, you should not pay less than 30 percent in taxes.


SCHULTZ: Well, President Obama is trying to have a conversation about
unfairness that is long overdue.

Mitt Romney`s effective tax rate for 2010 was at 13.9 percent. I
guess you could say he`s the poster boy of how wealthiest Americans take
advantage of tax loopholes which are legal.

But today, Senator Dick Durbin of Illinois put Romney`s tax rate in
context. Senator Durbin said, "I think it`s impossible to explain why a
man making $21 million a year pays a lower tax rate than a working family
in my state of Illinois that makes $21,000 a year."

In other words, if you apply the Buffett Rule to Mitt Romney, he would
be paying more than 14 percent or 15 percent in taxes.


UNIDENTIFIED MALE: Is this Buffett tax designed to come at you?

ROMNEY: Well, it`s designed to come at me if I`m the nominee. If I
happen not to be the nominee, he`ll still take the 99 versus one attack. I
mean, he`s really trying to divide America and to try and say that
Republicans are all about the rich people. Look, Republicans are about
middle class Americans. I`m fighting to help middle class Americans get
better jobs and better incomes.


SCHULTZ: Pretty good spin, I`d say.

But let`s face the facts. Republicans set the table for the rich to
thrive and people like Mitt Romney are taking advantage of it. Romney`s
tax plan would give even more tax breaks to the wealthiest Americans. You
got that? His tax plan would do better to the wealthiest Americans?

Since 2006 Democrats voted twice in the House of Representatives to
get rid of this tax loophole known as carried interest. Now, I know you
got to be an accountant to understand all these lofty terms, but the
Democrats tried to do something about it because of the alternative minimum
tax issue, and there was a money gap there. And they said, OK, we`ll fix.
It didn`t go over in the Senate.

But lobbyists beat it back on behalf of the Private Equity Council.
Mitt Romney`s old firm Bain Capital benefits from lobbying efforts like
this one, no question about it.

I`m joined tonight by Robert Reich, former labor secretary under
President Clinton and currently a professor at U.C. Berkeley and author of
the book, "Aftershock."

Well, I`ll tell you what, Mr. Reich, it just seems to me that Mitt
Romney`s releasing of the tax returns is the right place at the right time
for a good political discussion in this country about fairness. What do
you think?

discussion, Ed. It`s an economic discussion. It`s a discussion about
whether we`re on the same boat together as Americans.

I mean, look back in the 1950s under Dwight Eisenhower, Republican
president, nobody ever accused of being a socialist, the top marginal tax
rate was 91 percent. And now you have Mitt Romney earning $20 million a
year, more than anybody, how many people do you know who are earning $20
million a year, the top one-tenth of 1 percent taking in more money than
they`ve taken in as a percentage of total income than we`ve seen since the
late 1920s and he and most other very wealthy people are paying 15 percent.

We have a budget deficit. We are laying off teachers. Our roads are
impassable, crowded, public transportation systems, dilapidated. And we
don`t have money to do what we need to do and here you have the wealthiest
people in America getting off not doing their patriotic duty.

It`s patriotism. It`s morality. It`s not just fairness.

SCHULTZ: Well, it`s the old saying, you win the crowd, you win the
issue. And you can move forward. But it just seems to me that if the
Democrats are going to win the conversation and explain to Americans right
now as everybody seems to be paying attention now to this discussion about
economic fairness in America, it would seem to me that Romney`s tax release
came at the right time. Here`s Mitt --


SCHULTZ: Yes, no doubt. Go ahead.

REICH: It came at exactly the right time, but it also comes at the
right time because Americans know they are losing public services. And
their tax bills are going up because the people at the top are not paying
their fair share.

SCHULTZ: Here is Mitt Romney saying his actual tax rate is about 45
percent. Here is how he spins it.


ROMNEY: One of the reasons why we have a lower tax rate on capital
gains is because capital gains are also being taxed at the corporate level.
So as businesses earned profit, that`s taxed at 35 percent. Then as they
distribute those profits in dividends, that`s taxed at 15 percent more.
So, all totaled, the tax rate is really closer to 45 percent or 50 percent.


SCHULTZ: You got to have a go at that, Mr. Reich. I don`t believe
that for a moment. I guess this backs up the comment he says people are

REICH: It`s ridiculous. I mean -- by that logic, if I pay a sales
tax because I buy something locally, and there is a sales tax of 5 percent
on it, that`s double taxation because the company that originally produced
it pay their corporate taxes, and the company that is selling it to me, the
retailer, is paying taxes as well.

I mean, this is ridiculous. Once you go down the line, it eviscerates
all personality. The fact of the matter is, Mitt Romney is paying on his

This is income, it`s -- I mean, whether you call it capital gains or
earned income or not earned income, it`s income and it`s income from his
job. And he`s paying 15 percent. While people, most -- middle class
Americans paying much more, a lot paying more than that.

If we`re having a society in which we`re all bearing part of the
responsibility and part of the sacrifice, then how can we tolerate that
kind of tax system? It just makes a mockery of the whole idea.

SCHULTZ: Robert Reich, I think you speak for millions of Americans
tonight in the arena of common sense. I appreciate your time. Thank you
so much.

REICH: Thanks, Ed.

SCHULTZ: Next up, Republican Governor Mitch Daniels tries to slam
President Obama by invoking Steve Jobs? But Daniels, well, he just can`t
get his facts straight again.

Nancy Pelosi says Newt Gingrich will never be the Republican nominee?
Gingrich says Nancy Pelosi has strange fantasies. Former Congressman Alan
Grayson will join me for a reality check.

Stay with us.


SCHULTZ: And in "Psycho Talk" tonight, anti-union, Indiana Governor
Mitch Daniels back at it trying to respond to the president`s State of the
Union address last night. The main purpose of Daniel`s speech was to
convince Americans President Obama is actually lying when he says the
economy is improving, even though the facts tell us otherwise.

Part of Daniels` argument was the bogus idea that President Obama is


GOV. MITCH DANIELS (R), INDIANA: Contrary to the president`s constant
disparagement of people in business, it`s one of the noblest of human
pursuits. The late Steve Jobs -- what a fitting name he had -- created
more of them than all those stimulus dollars the president borrowed and


SCHULTZ: Come on, Mitch. Why don`t you jump in this race. We would
love to have you. Apple creates plenty of jobs, but not in America. An
article in Sunday`s "New York Times" reports Apple employs 43,000 people in
the United States of America, most in the retail division.

But there are 700,000 people who manufacture Apple products like iPads
and iPhones. And almost none of them work in the United States of America.
Meanwhile, the Congressional Budget Office estimates the president`s
stimulus spending directly created or saved at least 1.4 million jobs, 32.5
time the number of Apple jobs in the country you`re in right now, the great
U.S. of A.

And the "New York Times`" columnist Paul Krugman also points out
Obama`s auto loan, just by it self, saved a lot more jobs than Apple`s U.S.
employment. Since June of 2009, the American automobile industry has added
back -- added back more than 170,000 jobs, almost four times more than U.S.
employees that Apple has in this country.

So for Mitch Daniels to say Steve Jobs created more American jobs than
President Obama is mathematically incorrect Psycho Talk.




SCHULTZ: Mitt Romney is looking out for the 99 percent, except when
he is chopping them down.


ROMNEY: America is right and you`re wrong.


SCHULTZ: Now the number one man at Fox News is ready to pull the plug
on Mitt. Sam Stein of "The Huffington Post" is here.

Newt Gingrich is now wearing his marital past as a badge of honor.


normal than somebody who wanders around seeming perfect. .


SCHULTZ: Former Congressman Alan Grayson will respond.

And Wisconsin roars back into the headlines. There are big surprises
in the new polling and new fundraising totals for Scott Walker. State
Senator Lena Taylor is here.


SCHULTZ: Welcome back to THE ED SHOW and thanks for watching tonight.
Things are heating up in Florida, with the latest CNN/"Time" poll showing
Mitt Romney and Newt Gingrich in a statistical tie. Both men are trying to
woo Florida Hispanic voters.

Nevertheless, Romney delivered this head scratcher at Monday night`s


TUCKER CARLSON, "THE DAILY CALLER": Governor Romney, there`s one
thing I`m confused about. You say you don`t want to go and round up people
and deport them, but you also say they would have to go back to their home
countries and then apply for citizenship. So if you don`t deport them, how
do you send them home?

ROMNEY: The answer is self-deportation, which is people decide that
they can do better by going home, because they can`t find work here,
because they don`t have legal documentation to allow them to work here.


SCHULTZ: Today, Gingrich mocked Romney`s response during an interview
with a Spanish language network, Univision, calling the proposal inhumane.


GINGRICH: I think you have to live in a world of Swiss Bank accounts
and Cayman Island accounts and automatic, you know, 20 million dollars a
year income with no work to have some fantasy this far from reality.
Remember that I talk very specifically about people who have been here a
long time, who are grandmothers and grandfathers, who have been paying
their bills. They`ve been working. They are part of the community.

Now, for Romney to believe that somebody`s grandmother is going to be
so cut off that she is going to self-deport? I mean, this verges -- this
is an Obama-level fantasy.


SCHULTZ: Let`s turn to Sam Stein, political reporter for "the
Huffington Post." Sam, they`re starting to really go at it now. The polls
are tightening up. Are we going to see more of this?

SAM STEIN, "THE HUFFINGTON POST": Yes. You marvel at how good
Gingrich is at just sort of turning the knife there. But yes, it is going
to get a little -- it`s going to get even more heated. Obviously, the
super PACs are buying up tons and tons of ad time in Florida, which has
about ten media markets to begin with. So there`s a lot of money to spend.

And it seems like it was a while ago, but it was only just two weeks
ago that Gingrich was pledging to run a positive campaign. It`s clearly --
that caution has been thrown out the window. It`s just going to get ugly
from here on out.

SCHULTZ: Sam, it would seem to me that that exchange, those two bites
we just played, that is a real soft underbelly for the Romney camp right
now. I mean, if they don`t do a better job on immigration, this is going
to cost them a bunch of votes. And we`ve seen Mr. Romney go back and
forth, have we not, on this issue? Or is he solid on it?

STEIN: Actually, on immigration, his one soft spot has always been
that he hired a lawn care company that employed illegals. But that isn`t
sort of a policy soft spot. That`s just an aspect of his personal life
that is an embarrassment to his current position.

But you`re right. He has gotten hard line on immigration. And it
suits him fine for the primary. But it`s really a problem in the general
election. Look at any demographic trends. You know that Hispanics are a
rising voting block.

Jeb Bush is out with an op-ed I think in the "Washington Post"
tomorrow about how -- the need for the Republican party to take Hispanics
more seriously. Obviously, this is a big issue that is going to confront
Romney should he be the nominee.

SCHULTZ: At the same forum that we just heard that soundbite come
from Newt Gingrich, Romney was talking about his wealth. He was squirming
quite a bit when he was asked about his wealth. Here it is.


ROMNEY: It`s between 150 and about 200 some odd million dollars. I
think that is what the estimates are. By the way, I didn`t inherit that.


SCHULTZ: Sam, are you worth maybe 100 some odd million? What kind of
answer is that?

STEIN: Let me talk to Arianna about my worth and I`ll get back to you
on that. You know, it`s an uncomfortable answer, obviously. And one of
the things that sort of struck me these past -- this past week, when his
taxes and his income has been in the news, is just how uncomfortable Mitt
Romney is talking about this stuff.

He is a man of obvious wealth. But there was a great article in the
"New York Times" that he also is quite frugal when it comes to his day-to-
day activities. You get the sense that this whole think makes him really
squeamish. And part of that is really rubbing voters the wrong way,
because they realize that is very wealthy. They see him talk about it in
these uncomfortable ways. And they sort of interpret it badly.

SCHULTZ: And to that point, Rupert Murdoch Tweeted today "Romney`s
tax returns might kill his chances. See the Republican establishment panic
now." How do you read that? The head of Fox is saying that it could be
over for Romney because of his taxes?

STEIN: Well, you know, he`s no dummy. I don`t know if this is an
editorial position by Murdoch, but it`s a very astute political position
here. He`s not a dummy. He can read the writing on the walls. You can
spin -- Romney can spin this all he wants as class warfare, but the fact of
the matter is that it`s easy for Democrats to turn him in a caricature of
the one percent. And that`s an effective argument going into this
election, when the country is consumed by the issue income inequality.


STEIN: -- personify the top of the ladder. Go ahead.

SCHULTZ: Do you think either one of these candidates will break out
in Florida or is it going to be neck and neck all the way to the big day?

STEIN: The polling right now says Gingrich might have peaked a little
bit. But it is going to be tight. I`m curious to see what happens with
Santorum voters, who could make the calculation that, you know, Rick
Santorum is not going to win in Florida; let`s throw our support to
Gingrich. I think that is what we have to look out for.

SCHULTZ: Sam, great to have you with us. Thanks so much.

This was the scene on Capitol Hill earlier today.




SCHULTZ: A standing ovation in the chamber, a rare moment of unity,
as members of Congress saluted their colleague, Arizona Congresswoman
Gabrielle Giffords. Today, Giffords resigned from Congress, a little more
than a year after she was shot in the head.

Tributes poured in from both sides. Giffords hand delivered her
resignation to the Speaker of the House, John Boehner, in a very emotional
moment. Congresswoman Debbie Wasserman-Schultz read Giffords` letter on
the House floor.


REP. DEBBIE WASSERMAN-SCHULTZ (D), FLORIDA: Amid all that was lost on
January 8th, there was also hope and faith. Hope and faith that as we are
set back by tragedy or profound disagreement, in the end, we come together
as Americans to set a course toward greatness.

Every day, I am working hard. I will recover and will return. And we
will work together again, for Arizona and for all Americans.


SCHULTZ: Giffords` last piece of legislation, a border security bill,
passed unanimously. >

Coming up, Democratic leader Nancy Pelosi says she knows something
about Newt Gingrich. Gingrich says if that is true, then spit it out.
Former Congressman Alan Grayson weighs in on all of it and more.



JOHN KING, CNN ANCHOR: Because of your history with Speaker Gingrich,
what goes through your mind when you think about the possibility, which is
more real today than it was a week or a month ago, that he would be the
Republican nominee and that you could come back here next January or next
February with a President Gingrich.

REP. NANCY PELOSI (D), MAJORITY LEADER: Let me just say this, that
will never happen.


SCHULTZ: That was Democratic Leader of the House Nancy Pelosi on Newt
Gingrich`s chances of getting his party`s nomination. And here`s what else
she had to say.


PELOSI: He`s not going to be president of the United States. This is
-- that is not going to happen.

KING: Why are you so sure?

PELOSI: There is something I know. The Republicans, if they choose
to nominate him, that`s their prerogative.


SCHULTZ: Here is Gingrich`s predictably snide response.


GINGRICH: Who knows? I mean, she lives in a San Francisco
environment of very strange fantasies and very strange understandings of
reality. I have no idea what is in Nancy Pelosi`s head. If she knows
something, I have a simple challenge: spit it out, tell us what it is. If
it -- I have no idea what she is talking about.


SCHULTZ: What she is talking about is the House ethics probe that
eventually led to Gingrich`s resignation from Congress, all of which is
public information. As Leader Pelosi told the "Plum Lines" Greg Sergeant,
"any reference I would make to the ethics committee is confined to the
public record."

Joining me tonight, Alan Grayson, former congressman from Florida and
also running for congress again. Alan, great to have you with us tonight.
What do you make of this exchange? Is there more on Newt Gingrich that
could deep six his candidacy? Because that`s the impression that the
Democratic leader is leaving.

ALAN GRAYSON, FORMER CONGRESSMAN: Well, I don`t know. But I do know
that a lot of things that Newt has said and done over the years are not
familiar to people yet. I`ll give you one example of that. Here in
Florida, more than 10 percent of the Republican vote will be Hispanic. And
I don`t think many Hispanics in Florida have any idea that Newt Gingrich
said that English should be our official language and that we should take
Spanish out of the courthouses, out of the police stations, out of the
schools and out of the Department of Motor Vehicles, and that Spanish is a
ghetto language.

How many people know that? Very few. It`s the same things with so
many things that Newt Gingrich has said and done over the years. His
record really hasn`t come out yet. He`s getting a free ride because Romney
is constantly on the defensive.

SCHULTZ: Well, Romney trying to go on the offensive. He got his two
cents in on this issue. He told Fox News if Nancy Pelosi knows those
things right now, she will hand them to Barack Obama`s campaign if Speaker
Gingrich were our nominee.

How is this back and forth being played out with Floridians? Are they
paying attention to this Romney-Newt back and forth, and with now Nancy
Pelosi in the mix?

GRAYSON: I think so. About half of the vote in Florida is in the
Tampa and Orlando area, among the Republicans. That is a sort of free
floating vote. These are people who, by and large, have come from
elsewhere in the country. They don`t have strong political or geographic
affiliations. So they could go in any direction.

I think what is going to happen, most likely, is that in the end, they
will decide they are a little more comfortable with Romney than with
Gingrich. A lot of them are born again, but they weren`t born yesterday.

SCHULTZ: Gingrich was pandering to the folks on the Space Coast
today. Let`s take a look.


GINGRICH: By the end of my second term --


GINGRICH: -- we will have the first permanent base on the Moon. And
it will be American.



SCHULTZ: He forgot to say that there wouldn`t be any taxation up
there, I`m sure. But anyway, how is that going to work? How is that kind
of talk playing?

GRAYSON: Well, I think it`s -- there is sort of a race between his
egomania and his racism. I think he`s running the most overtly racist
campaign that I`ve seen in this country since George Wallace, if you are
talking about presidential campaigns.

So I think what he tries to do is to do these dog whistle things to
people who he thinks he can connect with, to make up for his shortcomings,
frankly, as a human being. I just can`t believe that people have so much
disrespect for the seventh commandment that they would give him any serious
consideration at all.

SCHULTZ: What did you think of the president`s speech last night,

GRAYSON: I think there were a lot of good things in it. I think that
if there was one thing that was missing -- I don`t want to try to detract
from it, because it was a great, great speech. I think he needs to be more
specific about his plans to put Americans back to work.

SCHULTZ: OK. I`m sure he will do that as time goes on. It`s great
to have you with us, Alan Grayson. Always all the best.

And a programming note, tomorrow night, we will have a one-on-one
interview with House Democratic Leader Nancy Pelosi. Be sure to tune in
right here on THE ED SHOW.

Tonight, Wisconsin Governor Scott Walker desperately tried to make six
months of job loss look good in the State of the State Address in the state
of Wisconsin. State Senator Lena Taylor responds to Walker`s spin, next.


SCHULTZ: ED SHOW survey tonight, I asked the audience what do
Republicans care more about, creating middle class jobs or defeating the
president? Folks, I`m coming up on my third anniversary here at MSNBC.
This is an ED SHOW first. Zero, we have a zero percent -- zero percent say
creating jobs; 100 percent of you say defeating the president. We`ve never
had a 100 to zero.

I like to think I`m a pretty good salesman.

Coming up, Wisconsin State Senator Lena Taylor gives us her take on
Governor Walker`s State of the State Address. There was some shouting.
That is coming up next. Stay with us.



GOV. SCOTT WALKER (R), WISCONSIN: Our unemployment rate is down from
a year ago. In fact, it`s the lowest it`s been since 2008. We`re turning
things around. We`re heading in the right direction.

After three years of losing 150,000 jobs, Wisconsin actually added
thousands of new jobs in 2011.


SCHULTZ: Moments ago, Wisconsin Governor Scott Walker delivered his
State of the State Address in Madison. He told Wisconsinites the state was
heading in the right direction, but he left out some key details.
Wisconsin has lost more than 35,000 private sector jobs since Scott
Walker`s budget passed in June of 2011, including the loss of 3,900 private
sector jobs in December.

This chart shows total jobs in Wisconsin in 2011. The blue line is
before Walker`s budget was passed. The red line is after his budget was
passed. Wisconsin has lost jobs for six straight months. Governor Walker
is heading into a recall election with the worst jobs record in the

But his rich donors, well, they don`t seem to care about that or care
about jobs. Money is pouring into Walker`s campaign war chest, most of it
from out of state. He has raised 4.5 million dollars between December 11th
and January 17th; 61 percent of that money came from out of that state of
Wisconsin, meaning from outside Wisconsin.

And Walker can keep on raising money. He can take unlimited funds
until a recall election is officially declared. Today, a judge granted the
state officials an extra 30 days to validate the recall petitions.

With me now live from Madison is Wisconsin State Senator Lena Taylor.
Senator, good to have you with us. I understand that the governor was
interrupted four times tonight. Give us your characterization of the crowd
and how it was received.

LENA TAYLOR (D), WISCONSIN STATE SENATOR: Well, yes, the governor was
interrupted a few times, Ed. And people were -- a couple people were taken
out. Clearly, they had the house packed with individuals from the
administration and individuals -- you know, guests that the various
legislators had.

However, outside of the chambers, in the halls of the Capitol, you
have Wisconsinites all around saying that they want to recall Governor
Walker. That is the chanting that you hear behind me now.

SCHULTZ: There were four interruptions. We have one of them. Let`s
play it. Here it is.


WALKER: Because I respect the hard working people of Wisconsin, I
will continue to be a good steward of the taxpayers` dollar.



SCHULTZ: Was that planned or was that all spontaneous?

TAYLOR: You know, that was pretty spontaneous. The moment that he
said that he`s been a good steward, someone shouted out "liar." And
clearly, there have been many examples of where the governor has not been
honest with the people. In particular, he stated that he would not tax
Wisconsinites. And guess what, he did tax Wisconsinites.

He actually took 2.3 billion dollars and gave it to the biggest
corporations, in order for him to tax seniors, and to tax the poorest,
working people among us. So that person who shouted that out really only
spoke the facts, that he has not been a good steward.

And more importantly, she then said recall. Clearly, the people of
Wisconsin have done more than a million signatures to try to recall him.
His State of the State, Ed, was filled with additional lies. And frankly,
that same menu that he has been giving people of dishonesty.

SCHULTZ: I have to ask you, there`s a new poll out there showing that
he is running ahead of any of the potential opponents. Governor Walker
leading Tom Barrett, 50-44. Former Dane County Executive Kathleen Falk,
it`s 49-42, in favor of Walker. Leading former Congressman Dave Obey 49 to
43, and leading State Senator Tim Cullen by 10 points.

What do Democrats see? What are you going to do to close this gap?
And how serious of trouble are you in?

TAYLOR: I think the first thing is there are several polls out there.
That is one of many polls. And that particular poll, the pollster is a
Republican, and the particular individuals that he used when he did the
poll, there is a question about the individuals that were used in the poll.

So I question it. That is the shortest version I think I can give
you. But at this point, with almost as many signatures as he had votes, I
think we`re headed in the right direction, Ed. And I think that we are
going to have the candidates that we need in order to go forth. And we`re
going to continue to show this governor to be dishonest to the people of

SCHULTZ: Quickly, do you anticipate a tough primary fight between
Democrats to get the nomination, quickly?

TAYLOR: I do not. I do not expect that it will be a tough fight. I
believe it will be an opportunity to continue to show Walker for the
dishonest legislator, dishonest governor, executive that he has been.

SCHULTZ: Lena Taylor, great to have you with us tonight. We`ll
follow the story. Thanks so much.

That is THE ED SHOW. I`m Ed Schultz. You can follow me on the radio
at channel 127, Sirius XM, Monday through Friday, noon to 3:00. Follow me
on Twitter @EdShow and like THE ED SHOW on Facebook.

"THE RACHEL MADDOW SHOW" starts right now. Good evening, Rachel.
Great job again last night. Thank you.


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